Satyam Fraud Twice As Large As First Thought

By Robert Charette

Posted 2 Dec 2009 | 5:00 GMT

In January of this year, the IT outsourcing world was stunned to learn that the Chairman of India's Satyam Computer Services resigned after he confessed to doctoring the country's fourth largest IT outsourcing company's books for the past several years. The Chairman, Ramalinga Raju, admitted at the time that fictitious assets and non-existent cash concealed a $1.1 billion operating deficit.

Raju, who originally claimed that he acted alone, is in Hyderabad's Chanchalguda jail along with along with his brother and Satyam's former managing director, Rama Raju, along with six others including their former auditors. They are charged with the fraud, forgery, cheating, embezzlement and insider trading.

Last week, the Wall Street Journalreported that India's Central Bureau of Investigation (CBI) is saying that the actual fraud was more than $2.8 billion. The CBI noted that the company had paid out some $5.5 million in dividends to shareholders, which surprise, surprise included the accused.